Market News

Gold (GC=F)

Gold prices slumped in early European trading on Friday morning, after US president Donald Trump set a two-week deadline to decide on whether the US would get directly involved in the Iran-Israel conflict.

In a briefing on Thursday, White House press secretary Karoline Leavitt read a message from Trump: "Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks."

This provided some relief to investors who were concerned about the potential for more immediate US involvement in the conflict.

Foreign ministers from UK, France and Germany are due to hold talks with Iranian officials in Geneva later on Friday to discuss Iran's nuclear programme.

Read more: FTSE 100 LIVE: Markets upbeat as UK and EU begin talks on Iran and Trump sets two week deadline

European stocks opened higher on Friday morning, on the back of Trump's two-week pause. Meanwhile, gold prices fell, signalling that investors had become less risk averse, as the precious metal is considered to act as a safe haven asset amid political and economic uncertainty.

Gold futures (GC=F) were down 1.3% at $3,363.10 an ounce at the time of writing, while the spot gold price fell 0.7% to $3,348.84 per ounce.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Some temporary relief but not enough for anyone to hang their hats on properly as the situation remains way too unpredictable.

"Base case has started to shift in the direction of direct US involvement, which opens up a pandora's box of mess, but markets seem to be clinging to expectation that it all remains contained like it has in the past. The meeting today is material and could shift the needle — stay sharp."